By conducting independent and objective audits, evaluations and investigations,
we inspire public confidence in the integrity and security of SSA's programs
and operations and protect them against fraud, waste and abuse. We provide timely,
useful and reliable information and advice to Administration officials, Congress
and the public.

Authority

The Inspector General Act created independent audit and investigative units,
called the Office of Inspector General (OIG). The mission of the OIG, as spelled
out in the Act, is to:

Conduct and supervise independent and objective audits and investigations
relating to agency programs and operations.
Promote economy, effectiveness, and efficiency within the agency.
Prevent and detect fraud, waste, and abuse in agency programs and operations.
Review and make recommendations regarding existing and proposed legislation
and regulations relating to agency programs and operations.
Keep the agency head and the Congress fully and currently informed of problems
in agency programs and operations.

To ensure objectivity, the IG Act empowers the IG with:

Independence to determine what reviews to perform.
Access to all information necessary for the reviews.
Authority to publish findings and recommendations based on the reviews.

Vision

We strive for continual improvement in SSA's programs, operations and management
by proactively seeking new ways to prevent and deter fraud, waste and abuse.
We commit to integrity and excellence by supporting an environment that provides
a valuable public service while encouraging employee development and retention
and fostering diversity and innovation.

The objective of our review was to identify and prevent employees of the Social
Security Administration (SSA) from receiving Old-Age, Survivors and Disability
Insurance (OASDI) benefits or Supplemental Security Income (SSI) payments inappropriately
because of their earnings.

BACKGROUND

SSA has over 65,000 employees who administer the OASDI and SSI programs. The
OASDI program provides benefit payments to qualified retired and disabled workers
and their dependents as well as to survivors of insured workers. The SSI program
provides a minimum level of income to financially needy individuals who are
aged, blind or disabled.

DISABILITY BENEFICIARIES WITH EARNINGS

An individual is disabled under Social Security's regulations if he or she
is unable to engage in any substantial gainful activity (SGA) by reason of any
medically determinable physical or mental impairment that (1) can be expected
to result in death or (2) has lasted (or can be expected to last) for a continuous
period of not less than 12 months.

SGA is defined as work activity that involves significant physical or mental
activities performed for pay or profit. SSA has established earnings guidelines
as a basis for determining whether an individual is engaged in SGA, and average
monthly earnings above the guidelines may indicate the ability to engage in
SGA. Because an individual's entitlement to disability benefits is based on
the determination that he or she cannot engage in SGA, SSA must perform a continuing
disability review when earnings reported to the Agency indicate the beneficiary
has returned to work at the SGA level.

RETIREMENT BENEFICIARIES WITH EARNINGS

The Social Security Act requires the Agency to reduce benefits for beneficiaries
below the full retirement age, based on their earnings. SSA calculates the reduction
in benefits for earnings above the annual exempt amount.

SSI RECIPIENTS WITH EARNINGS

SSI is a means-tested program, and the amount of income is one of the criteria
for determining eligibility and the amount of payments. Generally, the more
income a recipient receives, the lower his or her SSI payment will be. SSA relies
heavily on recipient self-disclosure of all financial resources, as well as
computer matching with other Federal and State agencies, to ensure payment accuracy.

METHODOLOGY

To perform this review, we matched the Agency's employee data against a file
of OASDI beneficiaries and SSI recipients and identified 194 employees-174 who
received OASDI benefits and 20 who received SSI payments. We analyzed the match
and reviewed benefit applications and records, disability data, earnings records
and work activity review data to determine whether the individuals were still
working and if the benefits were paid appropriately. (See Appendix B for additional
information on scope and methodology.)

RESULTS OF REVIEW

Overall, SSA ensured that employees who are also entitled to OASDI or SSI are
paid the appropriate benefits. However, we identified 8 employees (out of 194
who received benefits) who were overpaid $245,311 in OASDI benefits because
of their earnings. By stopping these benefits, the Agency will save $124,176
over the next 12 months.

We referred these eight employees to our Office of Investigations (OI) for
criminal investigation. As of November 2007, three of these eight cases were
with the United States (U.S.) Attorney's Office or the District Attorney's Office
for prosecution due to possible fraud. For another three cases, the U.S. Attorney's
Office declined to prosecute the cases and they were being handled by SSA administratively.
Also, in the remaining two cases, SSA was taking administrative action.

BENEFITS PAID INAPPROPRIATELY

SSA paid $245,311 in OASDI benefits inappropriately to eight employees because
of their earnings:
" A woman, currently age 48, began receiving disability benefits in 1995
due to blindness. She returned to work in 1997 and began working for SSA in
2002, earning more than allowed under SGA guidelines to keep receiving disability
benefits. At least four reviews of work activity were initiated by SSA due to
postings on the Master Earnings File, but none of these were developed until
our review. As a result of our audit, SSA determined that her disability benefits
should have stopped in March 2002 and assessed an overpayment of $57,195 plus
an additional $1,977 for another beneficiary receiving benefits on her record.
OI presented the case to the District Attorney's Office in the jurisdiction
where she lives. On June 20, 2007, the District Attorney's Office accepted the
case for prosecution and mailed a plea agreement letter to her attorney on September
24, 2007. As of November 2007, pre-indictment plea negotiations were underway.

" A man, currently age 41, has received disability benefits since 1994
due to a spinal cord injury, and he began working for SSA in 2005. At our request,
SSA determined that his benefits should have stopped in September 2006 and assessed
an overpayment of $16,471 for this beneficiary and $9,631 for three other beneficiaries
on his record. OI presented this case to the U.S. Attorney's Office for prosecution
on June 6, 2007; and a meeting was held on November 15, 2007 regarding the decision
to prosecute the beneficiary.

A woman, currently age 47, has worked for SSA since 1995. In 2001, she applied
for survivor's benefits for herself and her child. The child's benefits were
approved, but the woman was not initially paid due to her income level. In 2006,
the woman's benefits were paid, and her benefit checks were deposited into the
same bank account as her child. However, she failed to notify SSA that she was
still employed, and when interviewed, she denied getting benefits or having
any knowledge of what may have caused them to start. She also provided a copy
of her income tax returns for 2006, which showed the SSA benefits were not reported.
After our review identified this case, the Agency determined she should have
never received benefits because of her earnings and assessed an overpayment
of $15,667-which she repaid in June 2007. OI presented this case to the U.S.
Attorney's Office for prosecution on July 3, 2007. However, the U.S. Attorney's
Office declined to prosecute; and as of November 2007, SSA was continuing to
work with OI to handle the case administratively.

A man, currently age 48, received disability benefits since 1997 due to back
problems. He returned to work in 2001 and began working for SSA in 2004. A medical
continuing disability review was initiated in 2000, but the case was not developed
even though 24 follow-up alerts were issued. A work continuing disability review
was initiated in 2004 but was not developed until our inquiry to SSA in December
2006. At our request, SSA determined that his benefits should have stopped in
December 2002 and assessed an overpayment of $61,995-which he began repaying
in August 2007. The U.S. Attorney's Office declined to prosecute this case,
but SSA was taking administrative action.

A man, currently age 38, has received disability benefits since 2004 due to
a herniated disc and began working for SSA the same year. Soon after we referred
this employee for investigation, he called the SSA Field Office to have his
disability checks stopped. He said that he had been working for his family for
a couple of months but would not give any details as to the dates of employment
or the name of the employer. SSA determined he was never eligible for benefits
and assessed an overpayment of $42,771. As of November 2007, the case was accepted
by the U.S. Attorney's Office for prosecution.

A woman, currently age 31, has worked for SSA since 1995. She became eligible
for mother's benefits (a type of survivors benefit not related to disability)
in 2000 and filed Annual Earnings Reports in 2000 and 2001. Her benefits had
not been adjusted since then because she did not report her earnings. SSA's
systems detected the earnings and issued alerts in 2002, 2003, 2004 and 2005.
SSA's Office of Quality Performance selected the case for review each year but
never acted on the alerts. As a result of our audit, the Agency determined that
her benefits should have stopped in January 2005 and assessed an overpayment
of $31,722. The U.S. Attorney's Office declined to prosecute this case, but
SSA was taking administrative action.

A man, currently age 64, applied for early retirement benefits in 2005 when
he reached age 62. He began working for the Agency in 1983 and continued to
work full time after receiving his early retirement benefits. In 2006, he earned
almost $126,000 from SSA and $3,000 from other sources-well in excess of the
annual exempt amount to be eligible for full early retirement benefits. His
benefits should have been reduced to $0 once his earnings reached $28,200. Upon
our referral, the Agency determined that he was never eligible for benefits
and assessed an overpayment of $7,882, which he began repaying in October 2007.

A man, currently age 48, began working for SSA in 2001. He stopped working in
November 2002 due to a stroke and began receiving disability benefits in May
2003. However, he resumed working for the Agency in 2003. Between 2003 and 2005,
he received $54,349 in disability benefits while working for SSA. He stopped
cashing his benefit checks in January 2006, but his Medicare premiums continued
to be paid by SSA. In 2006, he earned almost $93,000. Due to our identification
of this case, the Agency stopped his benefit payments in March 2007. The case
is being handled administratively by SSA's Center for Security and Integrity.

BENEFITS ADMINISTERED APPROPRIATELY
SSA administered benefit payments appropriately for 186 employees.
20 employees received SSI payments appropriately:
o 19 employees received SSI payments appropriately because the payments were
adjusted to reflect their earnings; and
o 1 employee actually stopped working before receiving benefits.
166 employees received OASDI benefits appropriately:
o 108 employees were ages 62 to full retirement age and received early retirement
or survivors benefits. These 108 individuals reported their earnings to SSA,
and their benefits were adjusted accordingly;
o 14 employees actually stopped working before receiving benefits;
o 43 employees' work activity was already being reviewed by the Agency; and
o 1 employee recently began working for SSA, but her survivor's benefits will
end this year when she becomes 18 years old.

CONCLUSION

All OASDI beneficiaries under full retirement age and all SSI recipients should
report their earnings and work activity to SSA. SSA generally paid benefits
correctly to its employees who were entitled to them but improperly paid OASDI
benefits to eight employees identified during our review. Ensuring that all
employees receiving benefits report changes in their situation that impact their
eligibility or benefit amounts-including earnings-demonstrates SSA's ability
to lead by example. This supports the Agency's strategic goal to prevent payment
error and fraud.

SSA took prompt action to stop the improper payments and worked with the OI
investigators on the potential fraud cases as soon as the Office of the Inspector
General made the Agency aware of them. As a result, we are not making any recommendations
for further action.

AGENCY COMMENTS

SSA stated they have taken the necessary corrective actions and will continue
with their efforts to detect and prevent fraudulent and improper payments. See
Appendix C for the full text of SSA's comments.

Appendix A
Acronyms
C.F.R. Code of Federal Regulations
OASDI Old-Age, Survivors and Disability Insurance
OI Office of Investigations
POMS Program Operations Manual System
Pub. L. No. Public Law Number
SGA Substantial Gainful Activity
SSA Social Security Administration
SSI Supplemental Security Income
U.S. United States
U.S.C. United State Code

Appendix B
Scope and Methodology

To accomplish our objective, we:

Reviewed applicable sections of the Social Security Act, Public Laws, the Code
of Federal Regulations and Social Security Administration (SSA) policies and
procedures.

o Determined whether the individuals in the match were still employed by the
Agency.
o Reviewed benefit applications and records, disability data, earnings records
and work activity investigation data for employees to determine whether they
were paid appropriately.
o Referred employees who may have received benefits inappropriately to the Office
of Investigations for criminal investigation. The investigators worked with
SSA staff to determine whether the employees were still working and whether
their benefits were paid appropriately.
o Calculated future savings for cases in which SSA stopped benefits because
of our review by multiplying the last monthly benefit by 12 months.

We conducted our audit between December 2006 and September 2007 in Boston,
Massachusetts. We found the data used for this audit were sufficiently reliable
to meet our audit objective. The entities audited were the Offices of Employment
Support Programs and Disability Programs, under the Deputy Commissioner for
Disability and Income Security Programs, and SSA Field Offices and Program Service
Center staff, under the Deputy Commissioner for Operations. We conducted our
audit in accordance with generally accepted government auditing standards.

We appreciate OIG's efforts in conducting this review, and thank you for the
opportunity to review and comment on this draft report. As the report indicates,
we generally paid benefits correctly to our employees who were entitled to them,
but improperly paid Old-Age, Survivors or Disability Insurance benefits to eight
employees identified in your review. We have taken the necessary corrective
actions and will continue with our efforts to detect and prevent fraudulent
and improper payments.

Please let me know if we can be of further assistance. Staff inquiries may
be directed to Ms. Candace Skurnik, Director, Audit Management and Liaison Staff,
at 410 965-4636.

For additional copies of this report, please visit our web site at www.socialsecurity.gov/oig
or contact the Office of the Inspector General's Public Affairs Specialist at
(410) 965-3218. Refer to Common Identification Number A-01-07-27116.

Overview of the Office of the Inspector General
The Office of the Inspector General (OIG) is comprised of our Office of Investigations
(OI), Office of Audit (OA), Office of the Chief Counsel to the Inspector General
(OCCIG), and Office of Resource Management (ORM). To ensure compliance with
policies and procedures, internal controls, and professional standards, we also
have a comprehensive Professional Responsibility and Quality Assurance program.

Office of Audit
OA conducts and/or supervises financial and performance audits of the Social
Security Administration's (SSA) programs and operations and makes recommendations
to ensure program objectives are achieved effectively and efficiently. Financial
audits assess whether SSA's financial statements fairly present SSA's financial
position, results of operations, and cash flow. Performance audits review the
economy, efficiency, and effectiveness of SSA's programs and operations. OA
also conducts short-term management and program evaluations and projects on
issues of concern to SSA, Congress, and the general public.

Office of Investigations
OI conducts and coordinates investigative activity related to fraud, waste,
abuse, and mismanagement in SSA programs and operations. This includes wrongdoing
by applicants, beneficiaries, contractors, third parties, or SSA employees performing
their official duties. This office serves as OIG liaison to the Department of
Justice on all matters relating to the investigations of SSA programs and personnel.
OI also conducts joint investigations with other Federal, State, and local law
enforcement agencies.

Office of the Chief Counsel to the Inspector General
OCCIG provides independent legal advice and counsel to the IG on various matters,
including statutes, regulations, legislation, and policy directives. OCCIG also
advises the IG on investigative procedures and techniques, as well as on legal
implications and conclusions to be drawn from audit and investigative material.
Finally, OCCIG administers the Civil Monetary Penalty program.

Office of Resource Management
ORM supports OIG by providing information resource management and systems security.
ORM also coordinates OIG's budget, procurement, telecommunications, facilities,
and human resources. In addition, ORM is the focal point for OIG's strategic
planning function and the development and implementation of performance measures
required by the Government Performance and Results Act of 1993.